I’ve been trying my best to keep the economy buoyant with shopping, but I tell you it’s tough work. Just recently…
- my local independent bookstore hasn’t had a title in stock 4 times in a row;
- I’ve had to order stock from clothing stores that haven’t had my size or colour;
- local music stores haven’t had CDs that I’ve been wanting to buy; and
- my optometrist hasn’t had contact lenses for my prescription in stock.
In each case, I’ve been given the option to order in what I’m looking for, but except for the clothes, I’ve declined this option, because if I can’t have the convenience of having it today, then I’m just going to find it, and order it online myself – it’s probably going to cost less, and I’ll be able to have the convenience of having it delivered directly to me, rather than having to make another trip to the store to pick up.
The good news traditional retailers is that for the time being they are surviving because:
- it’s convenient to be able to go into a store, pick something up, pay for it, and it’s yours;
- some people (notably Builders, Baby Boomers and the older Gen X) are still more uncomfortable with finding and buying products online (especially for clothing where people want to try a fit or feel of material);
- some people (Tweens & Teens) are blocked from buying online (by not having access to a credit card); and most importantly
- real-life shopping isn’t just about the the purchase, but for many shopping is a leisure, or social activity.
But times, they are a changing… Here’s why traditional stores might want to rethink their approach to retailing if they want to survive:
“Glorious explosion of subcultures”
Looking back at 1950’s high school there just a handful of popular youth subcultures: think jocks, preps and rebels.
Fast forward to today and there has been a glorious explosion of subcultures: Artsy, Band Gee, Barbie, Beatnic, Brainy, Cheerleader, Chola, Cholo, Cool Asian, Emo, Gangsta, Geek, Goth, Hardcore Kid, Hippy, Hipster, Jock, Loner, Metal Head, Nerd, Normy, Outcast, Plastic, Playa, Populars, Poseur, Posh, Prep, Punk, Queer, Quiet, Raver, Rock, Scenester, Skater, Slut, Stoner, Vamp, Wannabe, Weirdo, and Wigger (and that’s not intended in any way to be a definite list).
We’ve moved from more uniform world of cultures to one with much more diversity, and with each of these that we associate with there are unique differences in how we entertain and express ourselves.
As subcultures multiply, more niches around fashion and music will occur meaning that it will become less likely that traditional stores will be able stock all the products that people desire.
In addition, media such as music is increasingly becoming available for instant purchase and access online. Apple allows movies to be rented from it’s iTunes store, and devices like the Amazon Kindle continue to remove instant acquisition as a convenience allowed exclusively by physical retail stores.
Put simply: retail stores no longer have the monopoly on convenience.
Rise of the digital natives
People in Western nations who were born in the 90’s will soon form the next round of 20-somethings. These people are unique from previous generations because they have grown up immersed with the internet, cell phones, and iPods — they are the Digital natives.
Compare this to people born in previous generations — the pre-digitals. These people have grown up in a primarily physical world. When asked to describe of a collection of music, they will probably talk about a physical collection of CDs or records. When they think of going shopping, they will probably think of a trip to the mall or down their local high street.
Because Digital natives are equally familiar with digital and physical equivalents, when asked to describe a music collection they may be just as likely to talk about their iTunes library as they are a stack of CDs – they lack the exposure effect that has given physical equivalents an advantage with pre-digital generations.
As the population shifts towards having a larger group of Digital Natives we will see fewer people who are uncomfortable with the option of searching and buying products online.
Put simply: As we become more fluent with technology, physical stores loose the benefit of being the default paradigm of shopping.
More ways to pay
Until very recently, the main form of online payment was restricted to using a credit card, some groups of people don’t have access to credit cards (notably youth), and while some may find this hard to believe, there are many people who have simply preferred not to use credit cards (and given the fees in many countries – for good reason).
However, there are now various alternatives to the traditional credit card – many banks now issue debit cards – which allow funds from a cheque or savings account to be accessed through a credit card network, and it’s also possible to buy prepaid credit cards. Payments though a mobile phone are also being continuously explored, however as far as I know yet to be perfected.
Put simply: It will be less common for people not to have access to being able to make payments online.
A bleak future for retail?
I’ve painted a picture of a future where stores are less often going to have what we’re looking for (convenience is lost) and people don’t have second thoughts about finding and buying products online, and (except for their bank balance) don’t have barriers to purchasing online.
Traditional retailers are already struggling with the current recession, but I believe that this struggle has only intensified an already present trend, and that when the economy recovers the traditional retailers will continue to struggle — unless they adapt their current ways.
While I fear that traditional retailers who don’t adapt will not survive, I’m optimistic in general for those who are willing to change.
Subscribe to keep updated on the follow up post that looks at opportunities for bricks and mortar stores to thrive and survive the digital future.
Your thoughts
What are your thoughts on this post? Accurate prediction? Pointless hyperbole? Stating the obvious? I’d love to hear your thoughts, please add your comment and let me know.
Every day I find myself buying more and more online. Mainly because of convenience, specially in the music area, I used to not like buying digital music because I like having the CD case for my collection, but having the opportunity to get music at the exact moment of its release is a big plus. Also, as you mentioned some times the stores don’t carry styles and sizes that are readily available online. I think brick and mortar retailing needs to be reinvented, the question would be how?
@Rand, thanks for your comment! I used to be avoid downloading music for exactly the same reason, I loved having stacks of CDs on display.
But after moving a few times and finding what a pain it is to schlep cardboard boxes full of jewel cases, about two years ago I transferred my CDs to a bunch of travel cases. They are much more manageable now, and I think of them just as a back up because I play music streamed from my computer to my stereo using an AirPort.
Here in NZ we’ve had a huge music store chain shut down about a year ago, it’s sad because a lot of the people in management are true pre-digitals, and might not of even downloaded music online before so it would be difficult for them to relate to the modern consumer.
Even with all these barriers, I think that their is going to be a successful future for selling music in retail — watch this space :D
shopping has always had a social component to it that has transcended generations, and I don’t see that changing. what is occurring is that retailers are dividing into two camps, but only one of them is readily apparent. That one is the conglomeration of ever-consolidating corporate retailers, whose objective is to drive volume by competing primarily on price and commoditizing everything they can. they are being aided and abetted by the Amazon’s of the world. The other camp is made up of highly specialized retailers selling niche products to a narrow range of customers based on shared passions and creating memorable, personalized customer experiences. You mentioned the explosion of fragmented sub-cultures today, and each is an excellent example of a potential niche built around a shared lifestyle. this is where much of the innovation in retail is going to come from, and where much of retailing’s future lies.
Hi Ted, it looks like you’re an expert in this area so thanks for taking the time to comment!
As well as the two camps that you describe, I think that there is also a third area of opportunity for shops that sell media like music and books, or services like travel and insurance, that will will still service a general market, but compete on value rather than price. Specifically be being able to provide expert knowledge and recommendations that you’d not expect from a conglomerate, and that web-based services like amazon or travelocity can offer. This is what I’m going to write about in the follow up post – if you have any interesting links that you’d like to share I’d love to hear back from you.